Barry R. Bekkedam, 49, of Hobe Sound, FL, is headed to federal prison for 11 months after being convicted in a brazen $13.5 million TARP fraud scheme tied to NOVA Bank, a financial institution he helped build and then bleed dry. Sentenced by U.S. District Court Judge C. Darnell Jones, II, in Philadelphia, Bekkedam was also hit with a $100,000 fine for his central role in a conspiracy to defraud the United States — a scheme that exploited taxpayer-funded relief meant for struggling banks.
Bekkedam, the former Board Chairman of NOVA Bank, and co-defendant Brian Hartline, the bank’s ex-CEO, were found guilty on April 27, 2016, on charges of conspiracy to defraud the United States, TARP fraud, and two counts of making false statements to federal authorities. Their crime? Faking financial health to qualify for Troubled Asset Relief Program funds by orchestrating phony capital injections — using the bank’s own money to create the illusion of private investment.
Founded in 2002, NOVA Bank began its downward spiral in 2008 under the weight of toxic loans and risky investments. By October that year, NOVA Financial Holdings, Inc., the bank’s parent company based in Berwyn, Pennsylvania, applied for $13.5 million through TARP. Approval came in June 2009 — but only if the bank could raise $15 million in private capital. Bekkedam and Hartline didn’t raise real capital. Instead, they engineered a circular loan scam: NOVA Bank funded three individuals who then ‘invested’ the money back into the parent company, fabricating proof of outside funding.
“TARP is intended for healthy banks. NOVA was not a healthy bank,” said Christy Goldsmith Romero, Special Inspector General for TARP. “As NOVA’s founder, Bekkedam wielded enormous influence over the bank, allowing him to orchestrate a conspiracy with its CEO to cook the bank’s books.” The manipulation was deliberate, coordinated, and designed to deceive federal regulators overseeing one of the nation’s most critical financial rescue programs during the Great Recession.
The fraud unraveled before the money even changed hands. The TARP funds were never disbursed. But the damage was done. Without legitimate capital or oversight, NOVA Bank limped along until October 2012, when federal and state regulators shut it down for good. The collapse wiped out investors, destabilized local trust in community banking, and exposed deep flaws in financial oversight.
The case was investigated by a coalition of federal agencies: the FBI, SIGTARP, IRS Criminal Investigations, FDIC Office of Inspector General, Federal Reserve OIG, and the Consumer Financial Protection Bureau. Assistant United States Attorney David J. Ignall led the prosecution. Bekkedam’s fall from bank founder to federal inmate underscores a grim truth: when greed hijacks governance, the public pays the price — even when the fraud fails.
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Key Facts
- State: Pennsylvania
- Agency: DOJ USAO
- Category: Fraud & Financial Crimes
- Source: Official Source ↗
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